Exchange 2003 Relay problem

Hi
I have an Exchange 2003 server.
On another network elsewhere I have an application that needs to send emails. I have configured it to use the public IP address of my Exchange server.
On the Exchange server I have added the public address of the remote server to the Relay tab of the virtual SMTP server.
If I try to send mail from the remote server through my Exchange, it will send if the recipient is inside my Exchange’s organisation but will not send mail to any other domain.
I get a “521 server does not accept mail” error.
I need my Exchange to relay any mail to any recipient from this remote server.
Where am I going wrong?
Thanks for your help